Alpha company produces two products, X and Y, that are sold to retailers. The budgeted sales volumes for the next quarter are as follows: Product Unit X 32000 Y 56000 The inventory of finished goods is budgeted to increase by 1000 units of X and decrease by 2000 units of Y by the end of that quarter. Materials A and B are used in production of both products. The quantities required of each material to produce one unit of the finished product and the purchase prices are shown in the table below: A B X 8kg 4kg Y 4kg 3kg Purchase price per kg $1.25 $1.80 Budgeted Opening Inventory 30000kg 20000kg The company plans to hold inventory of raw materials at the end of the quarter equal to 5% of the quarter's material usage budget. Required: A) Prepare the following budgets for the quarter: i) the production budget in units ii) the material usage budget (in kg) iii) the material purchases budget (in kg and $) B) What is the Master Budget and why is it useful?

managerial accounting

main topics from this course: Budgeting,Overhead and Marketing Variances,- Absorption Costs Systems and Cost Allocation

How does the information presented in this course compare with your life experiences and career goals?

What is the most significant concept from this course that you will carry with you as you continue your educational journey?

[The following information applies to the questions displayed below.] Astro Co. sold 20,400 units of its only product and incurred a $53,368 loss (ignoring taxes) for the current year as shown here. During a planning session for year 2018’s activities, the production manager notes that variable costs can be reduced by 50% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $154,000. The maximum output capacity of the company is 40,000 units per year. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31, 2017 Sales $ 773,160 Variable costs 618,528 Contribution margin 154,632 Fixed costs 208,000 Net loss $ (53,368 ) 4. Compute the sales level required in both dollars and units to earn $240,000 of target pretax income in 2018 with the machine installed and no change in unit sales price. (Do not round intermediate calculations. Round your answers to 2 decimal places. Round "Contribution margin ratio" to nearest whole percentage)

On February 12, 2005, Nancy Trout and Delores Lake formed Kingfisher Corporation to sell fishing tackle. Pertinent information regarding Kingfisher is summarized as follows.

Kingfisher's business address is 1717 Main Street, Ely, MN 55731; its telephone number is (218) 555-2211; and its e-mail address is [email protected]. The employer identification number is 11-1111111, and the principal business activity code is 451110.

Nancy owns 50% of the common stock and is president of the company, and Delores owns 50% of the common stock and is vice president of the company. No other class of stock is authorized.

Both Nancy and Delores are full-time employees of Kingfisher. Nancy's Social Security number is 123-45-6789, and Delores's Social Security number is 987-65-4321.

Kingfisher is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. Kingfisher uses the straight-line method of deprecation for book purposes and accelerated depreciation (MACRS) for tax purposes. During 2018, the corporation distributed cash dividends of $80,000.

Kingfisher Corporations depreciable assets with $240,000 original cost were purchased on September 15, 2015. These assets are classified as 5-YR MACRS. You will need to determine the correct 2018 tax depreciation expense on these assets and take this into consideration in your final solution on form 1120

Kingfisher's financial statements for 2018 are shown below.

*The depreciation expense for taxes is the sames as the depreciation expense per the books.

During 2018, Kingfisher made estimated tax payments of $27,000 each quarter to the IRS.

Determine Kingfisher's income tax liability for tax year 2018 providing the following information that would be reported on Form 1120 and supporting schedules.

Additional question: What should Kingfishers deferred federal tax asset or liability be as of December 31, 2018. Show calculation please

Part A On January 1, 2018, ABC Co. provides goods to a customer with the following payment plan: Date Amount Jan 1, 2018 $1,500 Jan 1, 2019 $1,000 Jan 1, 2020 $1,000 Jan 1, 2021 $1,000 Jan 1, 2022 $4,000 Total $8,500 The customer normally would be subject to 8% interest. Required: a) What is the product revenue that is recorded by ABC on the sale on January 1, 2018? b) What will be the interest revenue for 2018 for ABC as a result of this transaction? Show and label all calculations. State all factors. You may use your finance formulas or tables from the book only. Part B SMU Inc. sold product to a customer on December 31, 2018. The customer’s price was “$10,000 with no interest”. The customer only has to make annual payments of $2,000 per year for five years, starting December 31, 2019. The customer would normally be subject to 10% interest based on their risk level. The cost of the product sold was $7,000 to SMU. Required: a) Calculate the revenue SMU Inc. would record on the car sale in 2018. (Show your calculations.) **USE PV tables from the book only. State all factors. b) Calculate the gross profit on the product sale. c) Prepare all journal entries for 2018 and 2019 as a result of this arrangement. d) What is the value of the outstanding note receivable from the customer after the first payment on December 31, 2019?

Music Teachers, Inc., is an educational association for music teachers that has 19,900 members. The association operates from a central headquarters but has local membership chapters throughout the United States. Monthly meetings are held by the local chapters to discuss recent developments on topics of interest to music teachers. The association’s journal, Teachers’ Forum, is issued monthly with features about recent developments in the field. The association publishes books and reports and also sponsors professional courses that qualify for continuing professional education credit. The association’s statement of revenues and expenses for the current year is presented below.

      The board of directors of Music Teachers, Inc., has requested that a segmented income statement be prepared showing the contribution of each segment to the association. The association has four segments: Membership Division, Magazine Subscriptions Division, Books and Reports Division, and Continuing Education Division. Mike Doyle has been assigned responsibility for preparing the segmented income statement, and he has gathered the following data prior to its preparation.

a. Membership dues are $100 per year, of which $20 is considered to cover a one-year subscription to the association’s journal. Other benefits include membership in the association and chapter affiliation. The portion of the dues covering the magazine subscription ($20) should be assigned to the Magazine Subscription Division

b. One-year subscriptions to Teachers’ Forum were sold to nonmembers and libraries at $30 per subscription. A total of 3,300 of these subscriptions were sold last year. In addition to subscriptions, the magazine generated $111,000 in advertising revenues. The costs per magazine subscription were $9 for printing and paper and $4 for postage and shipping.

c. A total of 28,100 technical reports and professional texts were sold by the Books and Reports Division at an average unit selling price of $25. Average costs per publication were $4 for printing and paper and $2 for postage and shipping.

d. The association offers a variety of continuing education courses to both members and nonmembers. The one-day courses had a tuition cost of $75 each and were attended by 2,500 students. A total of 1,880 students took two-day courses at a tuition cost of $125 for each student. Outside instructors were paid to teach some courses.

e. Assume that the Occupancy cost could be avoided by eliminating a division. Salary costs and space occupied by division follow:

       Personnel costs are 25% of salaries in the separate divisions as well as for the corporate staff. The $288,000 in occupancy costs includes $56,000 in rental cost for a warehouse used by the Books and Reports Division for storage purposes.

f. Printing and paper costs other than for magazine subscriptions and for books and reports relate to the Continuing Education Division.

g. General and administrative expenses include costs relating to overall administration of the association as a whole. The company’s corporate staff does some mailing of materials for general administrative purposes.

       The expenses that can be traced or assigned to the corporate staff, as well as any other expenses that are not traceable to the segments, will be treated as common costs. It is not necessary to distinguish between variable and fixed costs.

Required:  

1. Prepare a contribution format segmented income statement for Music Teachers, Inc. This statement should show the segment margin for each division as well as results for the association as a whole.

References

eBook & Resources

How do you gain and maintain the trust and confidence of colleagues and external contacts through professional conduct? Please also explain what not to do such as behaviours that destroy trust.

Walton Company is a retail company that specializes in selling outdoor camping equipment. The company is considering opening a new store on October 1, 2019. The company president formed a planning committee to prepare a master budget for the first three months of operation. As budget coordinator, you have been assigned the following tasks:

Problem 14-23 Part 1

Required

1. October sales are estimated to be $390,000, of which 40 percent will be cash and 60 percent will be credit. The company expects sales to increase at the rate of 20 percent per month. Prepare a sales budget.

2. The company expects to collect 100 percent of the accounts receivable generated by credit sales in the month following the sale. Prepare a schedule of cash receipts.

3. The cost of goods sold is 70 percent of sales. The company desires to maintain a minimum ending inventory equal to 20 percent of the next month’s cost of goods sold. However, ending inventory of December is expected to be $13,700. Assume that all purchases are made on account. Prepare an inventory purchases budget.

4. The company pays 60 percent of accounts payable in the month of purchase and the remaining 40 percent in the following month. Prepare a cash payments budget for inventory purchases.

5. Budgeted selling and administrative expenses per month follow:

1. *The capital expenditures budget indicates that Walton will spend $173,800 on October 1 for store fixtures, which are expected to have a $37,000 salvage value and a two-year (24-month) useful life.

Use this information to prepare a selling and administrative expenses budget.

6. Utilities and sales commissions are paid the month after they are incurred; all other expenses are paid in the month in which they are incurred. Prepare a cash payments budget for selling and administrative expenses.

7. Walton borrows funds, in increments of $1,000, and repays them on the last day of the month. Repayments may be made in any amount available. The company also pays its vendors on the last day of the month. It pays interest of 2 percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $29,000 cash cushion. Prepare a cash budget.

1.Why is it important for an accountant to understand their business and industry as well as managements informational needs in addition to knowing how to generate financial statements?

Note: You may use S&S as the context while answering this question. However, please present your own examples.

2.You are likely using various forms of social media (e.g., Twitter, Facebook). Please explore the idea of how would this non-financial information external to the company be of use? What other nonfinancial information would be useful? Could you think of financial information that is external to the organization that might be useful to management as well?

the following selected financial statement information is for Stevens Company

December 31  
2017   2016   Changes in assets
Current Assets   
   Cash $ 86,000   $71,000
   Accounts receivable 24,000 20,000   
   Merchandise inventory 20,000 27,000
   Prepaid expenses 10,000 8,000   
  
Current Liabilities  
   Accounts payable    41,000   44,000   

Income taxes payable   6,000   11,000
  
Other data for the Year Ended December 31, 2017  
From the income statement:  
   Net income   $146,000      
   Depreciation expense   32,000      
   Loss on sale of equipment   9,000      
              
From accounting records:  
   Capital expenditures   44,000      

Required:
a.   Using the indirect method, prepare the operating activities section of the statement of cash flows for Stevens Company for the year ended December 31, 2017.
  
b.   Calculate the following cash measures:
   (1)   Operating cash flow ratio (round to the nearest tenth of a percent).
   (2)   Capital expenditure ratio (round to the nearest tenth of a percent).
   (3)   Free cash flow

The following facts relate to questions 1 through 10:

The City of Oxford, Mississippi (population just under 24,000) passed a bond issue for $2,500,000, 4.5 percent, semiannual interest, 10 year bonds to finance the construction of a second high school to be called Yoknapatawpha High, named in memory of the Pulitzer Prize winning author, William Faulkner. The State also contributed $110,000 for construction of the gymnasium. The contractor selected then submitted her contract for $2,080,000 to commence on January 2, 2019, with the project’s estimated completion in late 2019.

1. The contractor submitted her signed contract to the City of Oxford. The entry to record the contract in the Debt Services Fund would include a:

A. Debit to Encumbrances—2019, $2,500,000.

B. Debit to Construction Work-in-Progress, $2,080,000.

C. Credit to Encumbrances—2019, $2,080,000.

D. Credit to Encumbrances Outstanding—2019, $2,080,000.

2. The money from the State of Mississippi of $110,000 was received by the City of Oxford’s General Fund. The monies were then transferred from the General Fund to the Capital Project Fund. The entry in the General Fund receiving the grant money from the state would include a:

A. Credit to Program Revenues—Public Education—Capital Grants and Contributions, $110,000.

B. Credit to Revenues, $110,000.

C. Debit to Other Financing Uses—Transfers-out, $110,000.

D. Credit to Other Financing Uses—Transfers-in, $110,000.

3. The entry in the General Fund transferring the state monies to the Capital Projects Fund would include a:

A. Debit to Cash, $110,000.

B. Credit to Cash, $110,000.

C. Debit to Other Financing Sources, $110,000.

D. Credit to Other Financing Uses, $110,000.

4. The entry in the Capital Projects Fund receiving the transferred state monies from the General Fund would include a:

A. Credit to Other Financing Sources, $110,000.

B. Debit to Other Financing Uses, $110,000.

C. Credit to Cash, $110,000.

D. Credit to Grants Receivable, $110,000. 3

5. When the contractor submitted a $700,000 progress billing, the following entry in the Capital Projects Fund would include:

A. Debit to Encumbrances—2019, $700,000.

B. Credit to Cash, $700,000.

C. Debit to Encumbrances Outstanding—2019, $700,000.

D. Debit to Construction-work-in progress, $700,000.

6. Assuming the partial billing was approved for payment and the expenditure and liability (contracts payable) was recorded for $700,000; however, Oxford has a policy of not paying 100 percent, but retaining 20 percent as a retained percentage. The entry in the Capital Projects Fund to record the allowed payment and retained percentage would include:

A. Credit to Cash, $560,000.

B. Debit to Contracts Payable, $560,000.

C. Credit to Contracts Payable—Retained Percentage, $560,000.

D. Debit to Contracts Payable, $140,000.

7. Prior to the receipt of the bond proceeds, Oxford needed funds and went to United Southern Bank to borrow $600,000 in bond anticipation notes (BANs), at 5 percent, which were to be paid back using the proceeds of the $2,500,000 bond issue. The entry at the government-wide level to record the receipt of the bond anticipation notes would include a:

A. Credit to Other Financing Sources—proceeds of BANs, $600,000.

B. Debit to Cash, $1,900,000.

C. Credit to Bonds Payable, $600,000.

D. Debit to Cash, $600,000.

8. Assume the bond issue commences, and the $2,500,000 proceeds are received. Oxford repays the bond anticipation notes in full along with $7,500 in interest. The entry recorded in the Capital Projects Fund to repay the bond anticipation notes would include a:

A. Debit to Other Financing Uses—Retirement of BANs, $600,000.

B. Credit to Cash, $600,000.

C. Debit to Bond Anticipation Notes Payable, $600,000.

D. Debit to Expenses—Interest on Long-term Debt, $7,500.

9. Assume that at the conclusion of the construction project that the total costs totaled $3,200,000. This included some cost overruns. Assuming the high school passes all inspections and the asset is placed into service, the re-class entry to record the Building in the Capital Projects Fund would include:

A. a Credit to Buildings, $3,200,000.

B. a Debit to Buildings, $3,200,000.

C. No entry would be recorded in the Capital Projects Fund.

D. a Credit to Encumbrances—2019, $3,200,000. 4

10. In the Capital Projects Fund, which of the following accounts would be part of the closing entry at the end of the project?

A. Cash.

B. Other Financing Sources—Proceeds of Bonds.

C. Expenses—Interest on Long-term Debt.

D. Construction Work in Progress.

Tyrene Products manufactures recreational equipment. One of the company’s products, a skateboard, sells for $37. The skateboards are manufactured in an antiquated plant that relies heavily on direct labour workers. Thus, variable costs are high, totalling $25.90 per skateboard, of which 70% is direct labour cost. Over the past year the company sold 43,000 skateboards, with the following operating results: Sales (43,000 skateboards) $ 1,591,000 Variable expenses 1,113,700 Contribution margin 477,300 Fixed expenses 277,500 Net operating income $ 199,800 Management is anxious to maintain and perhaps even improve its present level of income from the skateboards. Required: 1a. Compute the CM ratio and the break-even point in skateboards. (Do not round intermediate calculations. Round your answer to the nearest whole number.) 1b. Compute the degree of operating leverage at last year's level of sales. (Round your answer to 2 decimal places.) 2. Due to an increase in labor rates, the company estimates that variable costs will increase by $1.85 per skateboard next year. If this change takes place and the selling price per skateboard remains constant at $37.00, what will be the new CM ratio and the new break-even point in skateboards? (Round your intermediate calculations and the "Contribution margin" answer to 2 decimal places and other answer to the nearest whole number. ) 3. Refer to the data in (2) above. If the expected change in variable costs takes place, how many skateboards will have to be sold next year to earn the same net operating income, $199,800, as last year? (Do not round intermediate calculations. Round your answer to the nearest whole number.) 4. Refer again to the data in (2) above. The president has decided that the company may have to raise the selling price of its skateboards. If Tyrene Products wants to maintain the same CM ratio as last year, what selling price per skateboard must it charge next year to cover the increased labor costs? (Do not round intermediate calculations. Round your answer to 2 decimal places. ) 5. Refer to the original data. The company is considering the construction of a new, automated plant. The new plant would slash variable costs by 20%, but it would cause fixed costs to increase by 92%. If the new plant is built, what would be the company’s new CM ratio and new break-even point in skateboards? (Round your intermediate calculations and the "Contribution margin" answer to 2 decimal places and other answer to the nearest whole number .) 6. Refer to the data in (5) above. a. If the new plant is built, how many skateboards will have to be sold next year to earn the same net operating income, $199,800, as last year? (Do not round intermediate calculations. Round your answer to the nearest whole number.) b-1. Assume that the new plant is constructed and that next year the company manufactures and sells 43,000 skateboards (the same number as sold last year). Prepare a contribution format income statement. (Input all amounts as positive values except losses which should be indicated by minus sign. ) b-2. Compute the degree of operating leverage. (Round your answer to 2 decimal places.)

1. Marketing researchers have access to a great deal of information about consumers. What kinds of pressure might be brought to bear on a marketing researcher that might cause ethical dilemmas?
2. In 2005, a new federal law allowed consumers once-a-year free access to their credit reports. Many consumers who accessed their credit reports were surprised by the amount of information collected. What can marketers and marketing researchers do to minimize consumers' privacy fears?
3. What role do YOU (as the consumer) play in protecting your own privacy? In other words, what can you do to protect your privacy and what are ways that we give up access to our privacy?

Pell Corporation's property, plant, and equipment and accumulated depreciation accounts had the following balances at December 31, 2015:

Depreciation method and useful lives:

• Land improvements: Straight-line; 15 years.
• Building: 150%-declining-balance; 20 years.
• Machinery and equipment: Straight-line; 10 years.
• Automobiles: 150%-declining-balance; 3 years.
• Depreciation is computed to the nearest month. No salvage values are recognized.

Transactions during 2016:

1. On January 2, 2016, machinery and equipment were purchased at a total invoice cost of $260,000, which included a $5,500 charge for freight. Installation costs of $27,000 were incurred.
2. On March 31, 2016, a machine purchased for $58,000 on January 3, 2012, was sold for $36,500.
3. On May 1, 2016, expenditures of $50,000 were made to repave parking lots at Pell's plant location. The work was necessitated by damage caused by severe winter weather.
4. On November 2, 2016, Pell acquired a tract of land with an existing building in exchange for 10,000 shares of Pell's $20 par common stock, which had a market price of $38 a share on this date. Pell paid legal fees and title insurance totaling $23,000. The last property tax bill indicated assessed values of $240,000 for land and $60,000 for building. Shortly after acquisition, the building was razed at a cost of $35,000 in anticipation of new building construction in 2017.
5. On December 31, 2016, Pell purchased a new automobile for $15,250 cash and trade-in of an automobile purchased for $18,000 on January 1, 2015. The new automobile has a cash value of $19,000.

Required:

1. Prepare a schedule analyzing the changes in each of the plant assets during 2016. Disregard the related accumulated depreciation accounts.

Feedback

2. For each asset classification, prepare a schedule showing depreciation expense for the year ended December 31, 2016.

Feedback

3. Prepare a schedule showing the gain or loss from each asset disposal that Pell would recognize in its income statement for the year ended December 31, 2016.

QUESTION 31

1. The following financial information is given for Du Pont and Dow for fiscal year 2001:

   	Du Pont	Dow
   Closing Stock Price, Feb. 15, 2002	44.90	30.57
   EPS (actual for 2001)	4.50	-0.46
   EPS (forecast for 2002)	1.60	0.52
   Dividend per share	1.40	1.34
   5 year forecast earnings growth rate	10.2%	10.0%
   Intrinsic value per share	103.84	33.38

   Given the Feb. 15 stock prices, Du Pont & Dow have PE ratios (based on year-ahead EPS forecast) of:

   	a.	28.06 & 58.79, respectively
   	b.	9.98 & 58.79, respectively
   	c.	28.06 & 66.46, respectively
   	d.	32.07 & 22.81, respectively

2. Following Question 31, given the Feb. 15 stock prices, Du Pont & Dow have dividend yields of:

   	a.	13.72% & 13.40%, respectively
   	b.	3.56% & 1.70%, respectively
   	c.	3.12% & 4.38%, respectively
   	d.	31.11% & 2.58%, respectively

3. Following Question 31, given the Feb. 15 stock prices, PE based on actual EPS & 5-year-ahead earnings forecast, Du Pont has a PEG of:

   	a.	3.14
   	b.	0.98
   	c.	4.40
   	d.	2.75

4. Following Question 31, based on PEG, which company seems to be the better investment opportunity?

   	a.	Dow because of the very high PEG
   	b.	Du Pont because of the very high PEG
   	c.	Dow because the PEG is less than the benchmark cutoff of 1
   	d.	Du Pont because the PEG is less than the benchmark cutoff of 1

5. Following Question 31, based on intrinsic value to share price, Du Pont and Dow are:

   	a.	Du Pont is undervalued but Dow is overvalued
   	b.	Both are undervalued
   	c.	Du Pont is overvalued but Dow is undervalued
   	d.	Both overvalued